In the US, producer prices fell in February, more than expected. Core inflation was barely positive. That is not just a US trend. In Europe, price increases have fallen to the lowest level in 11 years. Japan is experiencing the biggest price drops in many years.
This sounds like a D-word to us…disinflation, almost deflation.
One report [...]
Stocks up, gold down.
Once again yesterday, investors demonstrated their preference for paper over the shiny yellow metal. The Dow Jones Industrial Average notched a slight 3-point gain, while gold tumbled about $17 an ounce.
This divergence between stocks and gold is not enormous, but it is telling. Most investors believe the credit crisis is a mere [...]
A new projection is now showing that roughly 1,000 US banks may fail because of the financial crisis that uncovered the toxic assets hidden on bank balance sheets.
According to Reuters:
“James Dunne, senior managing principal of Sandler O’Neill, said 300 to 400 banks could be seized this year, especially as institutions start to deal with deteriorating [...]
Snowy Sweden had its own banking crisis in the 1990s, but due to extensive bailouts emerged relatively unscathed… well, aside from rampant nationalizations and socialistic tendencies. Sound familiar?
Now, another hot idea from that same ice kingdom is catching on in the US. In 2009, in order to “protect” lenders, Sweden put a stability fee, charged [...]
A new research paper from the New York Fed connects some of the dots for thinking that monetary policy, balance sheets in banking, leverage,…
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Anthony Bolton may be Britain’s greatest investor. He ran the Fidelity Special Situations Fund from 1979 until his retirement in 2007. Over that 28-year span, the fund earned nearly 20% annually, thoroughly beating the market average of 13% over that time.
Because of his long and exceptional track record running a mutual fund and because of [...]
Make no mistake; the developed world is drowning in debt and there are only two viable options – a global economic depression or very high inflation. It is our contention that the policymakers have chosen the latter option and over the following years, we will experience the trauma of severe inflation.
Look. The American government is [...]
In yesterday’s confirmation hearing for his second four-year term as Federal Reserve chairman, Ben Bernanke received a thorough tongue-lashing from Senator Jim Bunning (R-KY). Here are a few highlights from the transcript as well as the video…
* “…you put the printing presses into overdrive to fund the government’s spending and hand out cheap money to [...]
The motivating idea behind the various U.S. bank rescue measures was to do whatever it would take to get bank loans to the private sector growing again. That mission remains distinctly unaccomplished.
Despite all the policy machinations — from TARP capital infusions to outright asset purchases, temporary lending facilities, a near-zero fed funds rate and various [...]
The age of de-leveraging is upon us. Bad news for the US economy; good news for gold.
For the past 60 years, corporate debt has grown faster than the economy – 4.1% annually for debt, compared with only 2.7% for the economy as a whole. In short, more and more debt went toward producing each dollar [...]
I was in New York earlier in the week for the Value Investing Congress. Among the more valuable presentations were those of Sean Dobson at Amherst Securities and Whitney Tilson and Glenn Tongue of T2 Partners.
They were valuable because they helped frame where we are in the mortgage crisis, which has been the main shark [...]
Well how about that! India pipped China at the post to walk away with 200 tonnes of IMF gold. Granted, India had to pay US$6.8 billion for the yellow metal. But with China steadily accumulating gold as a reserve asset (at the household AND central bank level), everyone thought China has this one in the [...]
Don’t expect too much market action until tomorrow afternoon, when the FOMC emerges from its latest meeting. Especially in light of another rate hike from the Reserve Bank of Australia overnight, the market wants to know when the Fed plans on abandoning its near-zero interest rate policy.
“We believe there will be no change in the [...]
In horse racing, a match race is when two horses race against each other. One of the most famous such races happened at Pimlico, when Seabiscuit beat War Admiral in November 1938.
In markets, one of the most watched and ongoing match races is the one between Emerging (or developing) Markets and Developed Markets. The former [...]
Stocks prices are very, very high… Our contrarian colleagues over at The 5-Minute Forecast continuously lament…which means that the collective anxiety of investors is very, very low. Our colleagues don’t mind that a rising stock market is adding trillions of dollars to the asset side of household balance sheets. That’s good news. But the worrisome [...]
